Sharma v LGSS Pty Ltd

Federal Court of Australia|2018-03-01|Before: Mr P, Mr J, Gleeson J

The appeal be allowed.
The matter be remitted to the Superannuation Complaints Tribunal for determination according to law.
The second respondent pay the applicant's costs of the appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GLEESON J: 1 The applicant ("Mr Sharma") appeals from two decisions of the Superannuation Complaints Tribunal ("Tribunal") made on 18 August 2016, pursuant to s 46 of the Superannuation (Resolution of Complaints) Act 1993 (Cth) ("Superannuation Complaints Act"). By s 46(1) of the Superannuation Complaints Act, a party may appeal to the Federal Court, on a question of law, from a determination of the Tribunal. By s 46(3), the Federal Court is to hear and determine the appeal and may make such order as it thinks appropriate. 2 The decisions under appeal affirmed decisions of : (1) the second respondent ("TAL"): (a) to avoid Mr Sharma's voluntary "Death and Total and Permanent Disability cover" ("TPD cover") ; and (b) to avoid Mr Sharma's "Salary Continuance Cover Long term (to age 65 benefit period)" ("SC cover") and cease paying him salary continuance payments; under s 29(2) of the Insurance Contracts Act 1984 (Cth) ("ICA") on the basis of fraudulent misrepresentation and non-disclosure by Mr Sharma; and (2) the first respondent ("trustee") to affirm TAL's decisions. 3 Section 29 of the ICA provided relevantly: (1) This section applies where the person who became the insured under a contract of life insurance upon the contract being entered into: (a) failed to comply with the duty of disclosure; or (b) made a misrepresentation to the insurer before the contract was entered into; but does not apply where: (c) the insurer would have entered into the contract even if the insured had not failed to comply with the duty of disclosure or had not made the misrepresentation before the contract was entered into; or (d) the failure or misrepresentation was in respect of the date of birth of one or more of the life insureds. (2) If the failure was fraudulent or the misrepresentation was made fraudulently, the insurer may avoid the contract. 4 As observed by senior counsel for TAL, Mr Morris SC, the circumstances involve a degree of legal complexity that appears not to have been exposed during the Tribunal proceedings. As explained below, the appeal involved consideration of issues that were not raised before the Tribunal. 5 For the following reasons, the appeal must be allowed and the matter remitted to the Tribunal for decision according to law. In short, the Tribunal erred in concluding that the decisions of TAL and the trustee were fair and reasonable because, on the facts found, TAL was not entitled to rely on s 29(2) to refuse Mr Sharma's claims.

Background facts 6 Mr Sharma is a former employee of Liverpool City Council. Local Government Super or the Local Government Superannuation Scheme (NSW) ("fund") is a superannuation fund established by the Local Government Super Trust Deed. The trustee of Local Government Super is LGSS Pty Ltd, the first respondent. 7 Mr Sharma became a member of Local Government Super in about April 2005, by signing a membership application. On 22 March 2007, he completed and signed a form entitled "Local Government Superannuation Scheme Voluntary Insurance Cover". By this form, Mr Sharma applied for TPD cover in the amount of $1,080,000 and SC cover in the amount of $3,640 per month. 8 The 22 March 2007 form refers to Prefsure Life Limited ("Prefsure") in the declaration at page 4 and, under the heading "Payment of invoice", the form states "Please have any invoices made out to Prefsure Life Limited. 9 In January 2009, the trustee wrote to Mr Sharma under the subject heading "Important changes effective 1 March 2009" referring to the recent appointment of TAL as insurer of Local Government Super. 10 In 2012, Mr Sharma lodged a claim for payment of a TPD benefit based on the medical conditions of a major depressive disorder with a date of onset of May 2007 and schizophrenia with a date of onset being 14 March 2008. He also supplied details of surgical treatment undertaken for wrist injuries sustained after a fall from a ladder in 2010. 11 In May 2013, Mr Sharma was informed by the trustee that his application for a TPD benefit had been approved and he was paid the sum of $68,841.73. Mr Sharma was also told that TAL was still assessing the voluntary insurance component of his application. 12 By letter dated 16 January 2015, TAL informed the trustee that it had "declined the member's underwritten cover". The letter stated relevantly: Policy number: GR 0385 Life insured: Sudesh Sharma Date of birth: 01/09/1968 Member No.: 3069587 Re - Underwritten cover for Income Protection and Total and Permanent Disablement Important news about this insurance claim We have carefully assessed the member's claim and based on the additional medical information, we regret to say we have declined the member's underwritten cover, which means that TAL will avoid Mr Sharma's underwritten Life, TPD and IP cover pursuant to s 29(2) of the Insurance Contracts Act 1984 for fraudulent misrepresentation/non-disclosure in relation to a history of tachycardia and depression. How we made our decision Underwritten Cover The member completed the application for Voluntary Insurance Cover on 23 March 2007, to obtain Income Protection cover and to increase his Total & Permanent Disability and Death cover. As per the Personal Statement, the member ticked NO to the entire health & medical History Questionnaire 3 and NO to the entire Questionnaire 5. Following the same, the member was accepted for cover, as under • IP - $3,640.00; Waiting Period 90 days and benefit expiry period till Age 65 • TPD / Death - $1,080,000.00 • Standard acceptance • Risk commencement date being 17 July 2007 … Based on the information contained in the clinical notes of Ryde Mental Health, it appears that the member was diagnosed with major depression in 2003 and treated with a variety of antidepressants following the sudden death of his wife in 2001. The member continued to receive treatment in the form of supportive counselling and medication throughout 2003 and 2004 until he ceased in January 2005. At that point in time he was advised to continue to take his medication despite no longer feeling depressed. The above confirms that had TAL been aware of Mr Sharma's history of depression and tachycardia, TAL would not have offered cover on the same terms. Accordingly, it is TAL's opinion to avoid the member's underwritten Life, TPD and IP cover pursuant to s 29(2) of the Insurance Contracts Act 1984 for fraudulent misrepresentation/non-disclosure in relation to a history of tachycardia and depression. 13 The reference to "IP cover" is a reference to Mr Sharma's SC cover. 14 By letter dated 5 February 2015, the trustee informed Mr Sharma of its resolution, dated 4 February 2015, as follows: To note that the insurer has avoided Mr Sharma's underwritten TPD and SC cover pursuant to section 29(2) of the Insurance Contracts Act 1984 for fraudulent misrepresentation/non-disclosure and in accordance with the terms of the Policy with the Trustee.

Tribunal's reasons 15 The Tribunal gave separate reasons in relation to the TPD cover and the SC cover. However, the reasons are relevantly similar and it is sufficient to focus on the reasons given in relation to the TPD cover. 16 After setting out certain matters under the heading "Complaint and background", the Tribunal identified the relevant trust deed as the deed as amended up to and including an amendment dated 1 October 2014. Mr Sharma did not contend that the Tribunal had identified the wrong trust deed. 17 The Tribunal found that the relevant policies were those in force on the date when TAL determined to decline Mr Sharma's claim for voluntary TPD cover on the basis of fraudulent non-disclosure, being 16 January 2015. The Tribunal identified as the relevant policies, two documents executed by the trustee and TAL commencing on 1 March 2009. The documents are entitled, respectively: (1) Group Life Insurance Policy Endorsement Policy No. GR 385-GL Local Government Superannuation Scheme ("TPD policy"); and (2) Group Salary Continuance Insurance Policy Endorsement Policy No. GR 385-SC Local Government Superannuation Scheme ("SC policy"). 18 Mr Sharma accepted that the March 2009 policies were relevant policies but contended that there may be other relevant policies, particularly policies entered into between the trustee and Prefsure, which may provide cover by reference to the date of occurrence of the insurable event. 19 The Tribunal identified ss 21, 29, 31 and 54 as relevant provisions of the ICA. 20 After setting out findings concerning medical reports and summaries of the parties' respective positions, the Tribunal recorded matters under the heading "Tribunal's deliberations and findings". 21 At para 50, the Tribunal stated: The Complainant joined the Fund in 2005 and applied for voluntary death and TPD cover of $1,080,000 in 2007. The Insurer accepted this cover on 17 July 2007 based on the answers provided by the Complainant on the application form. 22 At para 51, the Tribunal referred to the 22 March 2007 form and said: The Tribunal noted that the form included questions asking whether the Complainant had ever had heart disease, any mental disorder, depression, stress, anxiety or any ear disorder. It further noticed that the Complainant's duty of disclosure was detailed on the form. The Tribunal considered that the Complainant should have been aware that he was required to answer the questions in a manner that disclosed to the Insurer any matters that he knew, or could reasonably have been expected to know, was relevant to the Insurers' decision whether or not to accept the insurance risk. 23 At paras 52 to 54, the Tribunal made findings concerning the medical evidence before stating, at para 55: The Tribunal is of the opinion that the Complainant would have been aware of these conditions and could reasonably have been expected to know that they would be relevant to the Insurer's decision on whether or not to provide him with the requested voluntary cover in 2007. At the very least, the Complainant should have answered 'Yes" to questions asking if he had ever had heart disease, any mental disorder, depression, stress, anxiety or any ear disorder however minor the Complainant considered the ailments. 24 At paras 56 to 59, the Tribunal concluded: 56. The Tribunal was satisfied that it was open to the Insurer and the Trustee to determine that the Complainant had not complied with the duty of disclosure on his application form for voluntary death and TPD cover. 57. The Insurer has stated that, had it been aware of the Complainant's medical history when he applied for the voluntary cover, it would not have agreed to provide any insurance. The Insurer invoked s29(2) of the ICA to avoid the contract in relation to the Complainant. 58. The Tribunal noted that in order for the contract of insurance with the Complainant to be avoided, the failure to comply with the duty of disclosure had to be fraudulent. The Tribunal was satisfied, on the balance of probabilities, that the Complainant knew that he had been treated for a number of the conditions listed on the application form and should have known he had a duty to reveal them and accordingly the insurer was entitled to invoke s20(2) of the ICA to avoid the contract in relation to the Complainant. 59. For the reasons outlined above and having regard to the evidence submitted, the Tribunal is also satisfied that the decision of the Trustee, in its operation in relation to the Complainant was fair and reasonable in the circumstances.

Legal framework 25 The subject matter of the Court's jurisdiction under s 46(1) of the Superannuation Complaints Act is confined to a question or questions of law. The ambit of this appeal is therefore confined to a question or questions of law: see Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) FCR 315 at [62(1)] ("Haritos"), which concerned s 44(1) of the Administrative Appeals Act 1975 (Cth) ("AAT Act"); s 46(1) of the Superannuation Complaints Act is analogous to s 44(1). 26 The purpose of limiting an appeal to a question of law is to ensure that the merits of the case are dealt with not by the Federal Court but by the Tribunal: see Haritos at [194] citing Repatriation Commission v Owens (1996) 70 ALJR 904; noted 187 CLR 704. 27 The statement of the question or questions of law with sufficient precision is a matter of great importance but it is a matter of procedure, and the question whether or not an appeal is on a question of law is to be approached as a matter of substance rather than form: see Haritos at [62(2) and (6)] and [107]. 28 In certain circumstances, the Court may entertain an issue that was not previously raised in the Tribunal: see Haritos at [80]. In Repatriation Commission v Warren [2008] FCAFC 64; (2008) 167 FCR 511 at [78], Lindgren and Bennett JJ said, in relation to an appeal under s 44(1) of the AAT Act: • A party to the proceeding is not necessarily precluded from arguing on "appeal" matters that were conceded before the tribunal. Whether the party is so precluded depends on the nature of the matter conceded, its conduct of its case, whether the concession represented an agreement by the parties as to the facts to be decided and other relevant circumstances (Kuswardana v Minister for Immigration & Ethnic Affairs [1981] FCA 66; (1981) 54 FLR 334 at 195 per Bowen CJ and at 199 per Fox J). • Where a concession is made, there must be some difficulty in finding an "error of law" when the contrary of the concession is raised for the first time in this Court (Federal Commissioner of Taxation v Raptis [1989] FCA 381; (1989) 20 ATR 1262 at 1267 per Gummow J). … • There is a difference between factual matters not canvassed before the tribunal and a new issue relating to the validity of a regulation (Tefonu Pty Ltd v Insurance and Superannuation Commissioner [1993] FCA 412; (1993) 44 FCR 361 at 367 per Beazley J). • Even though the parties may be 'able, in practical terms, to narrow the issues by concession ... even a concession does not permit the [t]ribunal to avoid its duty as an administrative decision-maker to make the correct or preferable decision ... on all relevant aspects of the matter before it' (Peacock v Repatriation Commission [2007] FCAFC 156; (2007) 161 FCR 256 at [23]); … • The Court will more readily permit a matter to be raised for the first time in this Court on an appeal from a tribunal where: (a) the matter is a pure question of law, such as a question as to the validity of a regulation (Kuswardana at 195; Tefonu at 367) or a question as to whether the tribunal had applied the correct standard of proof on the true construction and application of legislation (Ferriday at 527-528 per Lee J); (b) the matter goes to a misapprehension that was shared by the parties before the tribunal and therefore by the tribunal itself (Perpetual Trustee Co (Canberra) Ltd v Commissioner for ACT Revenue [1994] FCA 1150; (1994) 50 FCR 405 at 418-419 per Wilcox J) such as a shared misapprehension as to the applicable law (cf Thomas at 120 per Beazley J); or (c) the matter goes to a condition precedent to the availability of a power, the exercise of which will have a serious impact on the individual (Kuswardana). 29 In Haritos at [81], the Full Court noted that these observations by Lindgren and Bennett JJ were approved by a subsequent Full Court in Hussain v Minister for Foreign Affairs [2008] FCAFC 128; (2008) 169 FCR 241 at [40]. 30 The questions of law are to be stated separately from the grounds relied upon in support of the orders sought in the notice of appeal: P v Child Support Registrar [2013] FCA 1312 at [50] ("P"). In P at [51], Wigney J said: The specification of the grounds relied upon in support of the orders sought should expose the links between the question of law, the circumstances of the particular case and the orders sought on the appeal: Birdseye [2003] FCAFC 232 at [17]-[18]. It is not legitimate to call in aid the grounds specified in the notice to read down the questions of law stated in the notice to what are truly questions of law. If the order sought is that the decision of the Tribunal be set aside, the grounds in support of that order should assume the resolution of the specified question of law in favour of the applicant and indicate, in a summary way, why that resolution requires the decision of the Tribunal to be set aside: Lambroglou at 524. Grounds drawn up in that way could not elucidate a question of law.

Issues raised by the parties 31 Mr Sharma's amended notice of appeal identified five questions of law and five corresponding grounds of appeal. After hearing submissions, I granted Mr Sharma leave to file an amended notice of appeal raising a sixth issue. The further amended notice of appeal was filed on 15 December 2017. 32 By its written submissions, TAL submitted that the appeal was incompetent because it raised arguments not raised before the Tribunal. The submission was not pressed orally and must be rejected in the broad terms in which it was made, having regard to the authorities identified above. 33 TAL also sought leave to rely on a notice of contention dated 21 November 2017. Leave was required because the notice of contention was filed out of time: rr 33.21 and 33.34 of the Federal Court Rules 2011.

Questions of law raised in notice of appeal 34 The questions identified in Mr Sharma's amended notice of appeal are: 1. Whether the Tribunal misconstrued s 21 of the Insurance Contracts Act as imposing, on or before 1 March 2009, a duty of disclosure on Mr Sharma as a third party beneficiary and life insured under: the TPD policy; the SC policy? 2. Whether there was any evidence that Mr Sharma made or was required to make any application to the insurer for cover under: the TPD policy; the SC policy and whether by providing cover in the absence thereof the insurer thereby waived compliance with any duty of disclosure of Mr Sharma? 3. Did the insurer waive compliance with any duty of disclosure of Mr Sharma or elect not to exercise any remedy it may have had under s 29(2) of the Insurance Contracts Act in respect of the TPD policy? 4. Whether there was any evidence that the insurer would not have entered: the TPD policy; the SC policy, even if Mr Sharma had not failed to comply with any duty of disclosure before the relevant contract was entered into? 5. Whether there was any evidence that the insurer avoided: the TPD policy; the SC policy? 35 TAL did not dispute that the questions set out in the amended notice of appeal were questions of law, except for question 3. I agree that question 3 is a question of fact. The second issue raised in question 2, also concerning whether there was a waiver, is also a question of fact. 36 Nor did TAL take issue with whether the identified questions were questions arising from the reasons of the Tribunal. In fact, TAL's oral submissions were substantially directed to the issues sought to be raised by the notice of contention. 37 The questions posed in the notice of appeal do not engage with the Tribunal's reasons in a straightforward way. For example, as to question 1, although the Tribunal identified s 21 of the ICA as a relevant provision, it did not record any analysis of that provision and it did not refer to s 21 in its "deliberations and findings". However, I accept that it is reasonable to infer that the Tribunal understood Mr Sharma to owe a duty of disclosure to TAL under s 21.by reason of its inclusion of s 21 as a relevant statutory provision and because the Tribunal concluded that TAL was entitled to invoke s 29(2) which applies in the circumstances set out in s 29(1). The relevant circumstances include where the person who became the insured "failed to comply with the duty of disclosure" in accordance with s 29(1)(a). The parties agreed that, by s 11 of the ICA, the "duty of disclosure" in s 29(1)(a) means the duty referred to in s 21. Thus, I accept that the Tribunal's reasons arguably involved a conclusion of law that s 21 applied to Mr Sharma. 38 As to question 2, the Tribunal's reasons do not contain an express finding that Mr Sharma "made or was required to make any application to the insurer for cover" under either the TPD policy or the SC policy. The Tribunal's reasons do not address the significance of the fact that the TPD policy and the SC policy were executed on 1 March 2009, well after Mr Sharma's application for voluntary cover was accepted in July 2007. I do not accept that question 2 is a question of law arising out of the Tribunal's determination and accordingly, I am not satisfied that the question is properly the subject matter of this appeal. 39 I accept that question 4 is a question of law: whether a finding of fact is supported by evidence is a question of law: Rawson Finances Pty Ltd v Commissioner of Taxation [2013] FCAFC 26 at [83]. This question of law arguably arises from the Tribunal's finding, at para 57 of its reasons that the "Insurer has stated that, had it been aware of the Complainant's medical history when he applied for the voluntary cover, it would not have agreed to provide any insurance". 40 For the same reason as for question 4, I accept that question 5 is a question of law. The question arguably arises from the Tribunal's finding, also in para 57 of the Tribunal's reasons, that TAL invoked s 29(2) "to avoid the contract in relation to the Complainant". 41 Pursuant to leave granted at the hearing of the appeal, Mr Sharma's notice of appeal was further amended to include the following sixth question: Whether the findings in; (a) paragraph 58 of decision numbered D16-17\017; (b) paragraph 58 of decision numbered D16-17\018 do not provide a sufficient basis for the conclusion that the Second Respondent was entitled to invoke s 29(2) of the Act to avoid the contract.

Question 1: Whether the Tribunal misconstrued s 21 of the ICA as imposing, on or before 1 March 2009, a duty of disclosure on Mr Sharma as a third party beneficiary and life insured under the TPD policy or the SC policy? 42 At all relevant times, s 21 provided relevantly: (1) Subject to this Act, an insured has a duty to disclose to the insurer, before the relevant contract of insurance is entered into, every matter that is known to the insured, being a matter that: (a) the insured knows to be a matter relevant to the decision of the insurer whether to accept the risk and, if so, on what terms; or (b) a reasonable person in the circumstances could be expected to know to be a matter so relevant. 43 Mr Bingham contended that the Tribunal had said s 21 applied to Mr Sharma to impose an obligation of disclosure on him. This contention was inaccurate: the Tribunal did not make any express statement concerning the application of s 21, beyond citing it as a provision of the ICA of relevance to Mr Sharma's complaint. 44 However, Mr Morris SC did not argue against Mr Bingham's interpretation of the Tribunal's reasons, or deny that the Tribunal had misconstrued s 21. Instead, Mr Morris SC argued that the Tribunal's decision could be defended by reference to ss 25 and 32 of the ICA. 45 Mr Morris SC also noted that Mr Sharma did not argue against the application of s 21 before the Tribunal, suggesting that this was a matter relevant to the question of relief. 46 The Tribunal referred to Mr Sharma's "duty of disclosure" at paras 51, 56 and 58 of its reasons. At para 51 of its reasons, the Tribunal stated that Mr Sharma's "duty of disclosure was detailed on the form", being the 22 March 2007 form. The Tribunal's reasons do not specify the object of the duty of disclosure; however, it is implicit in para 51 that the relevant duty is owed to the "Insurer". The cover page of the Tribunal's reasons refers to the Insurer as "TAL Life Limited (previously Prefsure Life Limited)". Thus, it is not clear whether the Tribunal was referring to a duty owed to TAL or Prefsure. 47 Mr Bingham submitted that, to the extent that the 22 March 2007 form asserted that the member completing the form had a duty of disclosure to the insurer under the ICA, that assertion was incorrect. In particular, Mr Sharma was not an "insured" and did not owe a duty of disclosure as an insured under s 21 of the ICA to any insurer. Mr Morris SC did not dispute that Mr Sharma was not an "insured" within the meaning of s 21. The ICA uses the term "insured" only in relation to contracting parties and not those who may benefit under a contract of insurance: see Carden v CE Health Casualty & General Insurance Ltd (1992) 7 ANZ Ins Cas 61-147; CE Health Casualty & General Insurance Ltd v Grey (1993) 32 NSWLR 25 ("Grey"). 48 The Tribunal did not identify a legal basis for its implicit conclusion that Mr Sharma owed a duty of disclosure to an insurer of the kind identified on the 22 March 2007 form, or the particular insurer to whom any such duty was owed. The Tribunal did not identify any other source for Mr Sharma's "duty of disclosure" under the ICA (as asserted by the 22 March 2007 form) and, accordingly, I accept that it probably assumed or considered that the duty arose from s 21, which it had cited as a relevant provision of the ICA. In doing so, it erred as to the proper construction of s 21. Properly construed, s 21 did not impose such a duty on Mr Sharma. 49 Mr Morris SC submitted that Mr Sharma owed a relevant duty of disclosure in connection with the 22 March 2007 form. He argued that Mr Sharma owed "the insurer" a general law duty of disclosure, but did not identify authority to support the existence of this duty and was not specific about the particular insurer to whom it was owed. In Grey, Mahoney JA at pages 36 to 40 contemplated that a non-party might owe a general law duty of disclosure to an insurer depending on the circumstances while Clarke JA (Meagher JA agreeing) referred to the relevant division of the ICA as a code. Accepting that there might be such a duty, I was not satisfied that this possibility provides a sufficient basis for the Tribunal's finding that Mr Sharma owed a duty of disclosure (apparently to TAL) in the terms detailed on the 22 March 2007 form. 50 Mr Bingham's submissions addressed factual questions about whether the 22 March 2007 form was provided to Prefsure or TAL (as opposed to the trustee), whether the cover provided to Mr Sharma in July 2007 was provided by Prefsure or TAL and whether Mr Sharma obtained cover under the TPD policy and the SC policy in 2009 on the basis of the contents of the 22 March 2007 form or whether that cover was provided without requiring evidence of insurability. Mr Bingham contended that there is no reason to think Mr Sharma believed that TAL was the insurer when he completed the March 2007 form and accordingly, there is no basis for the finding that he could have been expected to know that any matter was relevant to TAL's decision. It is not necessary or appropriate for the Court to address those factual questions, which may arise for determination by the Tribunal on remittal. 51 The error identified by the applicant goes to the heart of the Tribunal's conclusion that TAL was entitled to invoke s 29(2). 52 Accordingly, the Tribunal's decisions should be set aside and the matters remitted to the Tribunal for determination according to law.

Question 4 53 Question 4 is directed to whether s 29(2) had any relevant application in absence of evidence that s 29(1)(c) did not operate. 54 The question proceeds upon the flawed assumption that it was open to the Tribunal to be satisfied as to ss 29(1)(a) and (b) although, as explained above, the "insured" in s 29 is not Mr Sharma. 55 Once that is accepted, there is no present utility in considering the operation of s 29(1)(c). However, in the light of TAL's submissions that ss 25 and 32 operate to give the insurer rights under s 29, I make the following brief observations: (1) Under s 29(1)(c), the onus of proof rests with the insurer to satisfy the court that it would not have been prepared to enter into the contract of life insurance if the duty of disclosure had been complied with or the misrepresentation had not been made before the contract was entered into: see Schaffer v Royal & Sun Alliance Life Assurance Australia Ltd [2003] QCA 182 at [39]-[40]. There was evidence that TAL "would not have offered cover on the same terms", being TAL's 16 January 2015 letter. That was some evidence to support a conclusion that s 29(1)(c) was satisfied, albeit not sufficient to justify the finding, at para 57 of the Tribunal's reasons that, had the insurer been aware of Mr Sharma's medical history it would not have agreed to provide any insurance. (2) Section 29(3), in its terms prior to the 2013 amendments to the ICA, raises a different issue from s 29(1)(c), namely whether the insurer would have been prepared to enter into a contract on any terms.

Question 5 56 Question 5 concerns the power of the insurer under s 29(2) to "avoid the contract". Similarly to question 4, it proceeds upon the assumption that s 29(1) has been satisfied. For the same reasons, there presently appears to be no utility in addressing the scope of s 29(2), however, I note the following: (1) The Tribunal found (at para 57 of its reasons) that TAL invoked s 29(2) "to avoid the contract in relation to" Mr Sharma. (2) The language of TAL's 16 January 2015 letter, which referred to avoiding Mr Sharma's cover, supports this finding. (3) Section 29 does not confer an entitlement upon an insurer to avoid cover, or to avoid an insurance contract in relation to a beneficiary. (4) To the extent that the Tribunal found that TAL had avoided a relevant contract of insurance, it did not have an evidentiary basis for that finding. (5) Section 29(2) did not empower TAL to avoid the relevant contracts "in relation to Mr Sharma". (6) Accordingly, the Tribunal made a legal error (either in making a finding of fact without evidence or by misconstruing s 29(2)) in finding (at para 58 of its reasons) that TAL was entitled to invoke s 29(2) to avoid the contract in relation to Mr Sharma.

Question 6 57 Question 6 is a further question concerning the insurer's power under s 29(2). Section 29(2) operates if the insured failed to comply with the duty of disclosure in s 29(1)(a) (being the duty referred to in s 21) and the failure was fraudulent, or the insured made a misrepresentation of the kind in s 29(1)(b) and the misrepresentation was made fraudulently. 58 As for questions 4 and 5, there is no present utility in addressing the operation of s 29(2). However, I note that while a reckless (as opposed to a deliberate) failure to comply with the duty of disclosure may constitute a fraudulent non-disclosure, the finding that Mr Sharma "should have known that he had a duty" to reveal matters is not sufficient to make a finding of fraud: Plasteel Windows Australia Pty Ltd v CE Heath Underwriting Agencies Pty Ltd (1989) 5 ANZ Ins Cas 60-926 at 75-951 per Cole J; Von Braun v Australian Associated Motor Insurers Ltd [1998] ACTSC 122; (1998) 135 ACTR 1 at [83-87]) per Higgins J; Tyndall Life Insurance Co Ltd v Chisholm (2000) ANZ Ins Cas 90-104 at 86,140-1 per Debelle J.

Notice of Contention 59 The notice of contention states that the Tribunal was entitled to make certain findings that the 22 March 2007 form contained misrepresentations that were fraudulent misrepresentations. The notice then states that the Tribunal was entitled: (a) to find that each misrepresentation fell under s 25 of the ICA; (b) to affirm the decisions of the trustee on the basis that each misrepresentation fell within s 25; and (c) to affirm the decision of TAL on the basis that each misrepresentation fell within s 25. 60 At all relevant times, s 25 provided: Where, during the negotiations for a contract of life insurance but before it was entered into, a misrepresentation was made to the insurer by a person who, under the contract, became the life insured or one of the life insureds, this Act has effect as though the misrepresentation had been so made by the insured. 61 The facts found by the Tribunal do not enable me to determine whether s 25 may have any relevant operation. In order to decide whether s 25 applies it would be necessary to make findings about the following: (1) whether the statements in the 22 March 2007 form were communicated to an insurer; (2) if communicated to an insurer, whether the statements were misrepresentations made to that insurer by Mr Sharma; and (3) whether any such misrepresentations were made during the negotiations for a contract of life insurance but before it was entered into. 62 Without the proper factual foundation to consider the application of s 25, there is no utility in granting leave to rely on the notice of contention.

Section 32 63 Although it was not referred to by the Tribunal, or in the notice of contention, TAL made submissions that s 32 of the ICA has a relevant operation. As none of Mr Sharma's questions of law concern the application of that provision, I am not persuaded that it falls within the subject matter of the appeal. Accordingly, I have not addressed the submissions concerning the operation of s 32: cf. Commissioner of Taxation v Donoghue [2015] FCAFC 183 at [63] per Kenny and Perram JJ.

Conclusion 64 The appeal must be allowed. The matter will be remitted to the Tribunal for determination according to law. TAL should pay Mr Sharma's costs of the appeal. I certify that the preceding sixty-four (64) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson.

Administrative Appeals Act 1975(Cth)s 44(1)

Insurance Contracts Act 1984(Cth)ss 21, 25, 29, 31, 32, 54

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